The following correction was printed in the Guardian's Corrections and clarifications column, Friday June 22 2007

DePaul University is not one of the "top 10" American private universities, as we stated in the article below. It is one of the 10 largest. This has been corrected.

One of the most rancorous disputes in American academia has ended with a prominent political scientist with controversial views on Israel and anti-semitism being denied tenure at one of the country's largest universities.

Norman Finkelstein, author of The Holocaust Industry, now has less than a year remaining on his contract with the political sciences department of DePaul University in Chicago. He lost his bid for a lifelong post after a four to three vote of the promotions and tenure board.

The decision came at the end of several months of wrangling, both within the Catholic university and within the wider academic and Jewish communities in the US. Mr Finkelstein has argued in his books that claims of anti-semitism are used to dampen down criticism of Israeli policy towards the Palestinians and that the Holocaust is exploited by some Jewish institutions for their own gain.

His position as a Jewish intellectual critical of Israel and of some elites within the Jewish community has prompted passionate debate on both sides.

Intellectuals such as the prolific writer Noam Chomsky and the Oxford historian Avi Shlaim have spoken out in Mr Finkelstein's favour, but others have decried him in equal measure as giving succour to anti-semitism. His most bitter opponent is Alan Dershowitz, a Harvard law professor, who campaigned heavily to prevent tenure being granted. Soon after Mr Finkelstein applied for it, Mr Dershowitz sent DePaul faculty members a dossier of what he categorised as the "most egregious academic sins, outright lies, misquotations, and distortions" of the political scientist.

The dispute has roots that go deeper still, with Mr Finkelstein devoting much of his most recent book, Beyond Chutzpah: On the Misuse of Anti-Semitism and the Abuse of History to an attack on Mr Dershowitz's own work, the Case for Israel. Mr Dershowitz threatened to sue.

Mr Finkelstein, the son of Holocaust survivors, has responded to the decision to, in effect, sack him from his job at DePaul by condemning the vote as an act of political aggression. "I met the standards of tenure DePaul required, but it wasn't enough to overcome the political opposition to my speaking out on the Israel-Palestine conflict."

He told the Chicago Sun-Times: "They can deny me tenure, deny me the right to teach. But they will never stop me from saying what I believe."

On his website, he has posted letters of support from students and alumni of DePaul. Mr Finkelstein's own department of political science lobbied in favour of tenure, but he was opposed by the Dean of the College of Liberal Arts and Sciences.

DePaul is the largest Catholic university in the US. It employs more than 800 full-time faculty members.

The president of the university, the Rev Dennis Holtschneider, who made the final decision, put out a statement explaining why he endorsed the rejection of tenure - a decision that normally remains private under academic protocol. He said: "Some will consider this decision in the context of academic freedom. In fact, academic freedom is alive and well at DePaul."

The president also made clear reference to the Finkelstein-Dershowitz fisticuffs, saying there had been considerable outside debate. "This attention was unwelcome and inappropriate and had no impact on either the process or the outcome of this case."

Mr Chomsky said before the announcement that the dispute was "outrageous. [Finkelstein] is an outstanding scholar. It's amazing that he hasn't had full professorship a long time ago."